Fiscal cliff, defense sequestration draws closer

Fiscal cliff, defense sequestration draws closer

Capitol Hill is empty this day after Christmas, but the fiscal cliff and the question whether Congress will be able to come to an agreement still hangs over the city.

So much so that residents can’t even escape the fiscal dialogue when dropping into Starbucks. Baristas are writing “come together” on all cups in their Washington D.C. shops to inspire politicians and their staffs to look past their differences and settle on an agreement to avoid the budget cuts and tax increase the cliff would bring.

Pentagon officials and defense industry execs have paid close attention to any sign that a deal is being worked on since House Speaker John Boehner’s proposal blew up after he couldn’t formulate enough support among Republicans. Those same leaders have watched the president’s flight plans closely noting how he returned from his annual Hawaii holiday vacation early on Wednesday.


It still stands to be seen what sort of leadership the president will provide ahead of the January deadline. Plenty have speculated that both sides of Congress will welcome the fiscal cliff because it creates the additional tax revenue the Democrats have sought. And with that tax increase, it will allow the Republicans to agree to a proposal that will like offer a tax break to offset the expiration of the Bush-era tax cuts.

Outside the implications on the stock market of this game of economic chicken, plenty of defense leaders are waiting to see if this means the mandated defense sequestration cuts will remain once the agreements are signed. The Budget Control Act mandates a 10 percent cut, or about $500 billion, to planned defense spending over the next decade.

Defense analysts have speculated that the defense cuts will be dealt with in the forthcoming agreement if Congress allows the nation to go over the fiscal cliff. U.S. Sen. Carl Levin, chair of the Senate Armed Services Committee, suggested the Pentagon could absorb a $100 billion cut rather than the $500 billion. It’s unclear whether that plan is being discussed, but it has been floating within the national debate.

Work continues on the 2013 defense budget as the conferences completed and settled on spending debates between the House and Senate. However, those budgets could change should the nation plummet off the fiscal cliff. Services will have to make changes to absorb the forthcoming cuts.

Tax rates and entitlements cuts continue to dominate the debate. Defense cuts have, for the most part, been left on the sidelines and gained little attention. However, defense modernization and readiness accounts expect to take a substantial blow should the sequestration cuts remain. No service will be left out should the $500 billion cut remain no matter where each stands under the new defense strategy or Air Sea Battle.

U.S. Sen. Joe Lieberman said Sunday he expects the debate to go right up to the New Year’s deadline and admitted that he expected the deadline to pass without a deal. The same prognostications occurred with the run up to the 2011 debt ceiling as pressure mounted. An agreement was forged then, but this debate is different and plenty of questions remain.

Boehner is expected to return Thursday. Plenty of other Congressional power players remain in D.C. Levin was seen on Christmas Eve shopping for last minute presents at a farmer’s market on Capitol Hill. It might sound counter intuitive, but the less the Congressional power players speak in public, the more likely an agreement is being hashed out. Meanwhile, the countdown to the end of 2012 will hold even greater meaning to those in the military awaiting to see their future budget fate.

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I don’t understand how so many so lawyer’s and elected official dont have the knowledge of what a big impact the cliff will have on all american’s.I am not saying the millionaier should that the blunt,but they suer can help solve this mess.the military and the disable veterans are taking a big hit on all aspect we faces

I may sound crazy saying this, but I don’t think that sequestration would be that bad and in terms of what America needs as a nation I don’t think going over the so called “fiscal cliff” would be that bad.

Massive spending cuts, no matter which way you cut it, are exactly what America needs and the military services have been among some of the most wasteful spenders. The FCS, LCS, and F-35 have shown that when the military is given excess amounts of money they aren’t always wise with how they spend it. The fact that they could lose one program, the F-35, and nearly satisfy the entirety of the cuts is extremely telling. If the military had their budget cut it will force them to stop spending ridiculous amounts of money on useless projects. We don’t need to spend more on our military as we are already leagues ahead of our nearest competitors.

No one wants an increase in taxes, but you can’t expect to spend money you don’t have and not reap the consequences. Those tax increases will go a long way toward paying off our national debt. Yes, we will all feel the effects of them on our wallets, but it will not be permanent. In fact, we as a nation will still have a much better living than a vast majority of the rest of the world if the tax increases fall through. That’s not to say that I want them to actually go through. Believe me, I want congress and the President to fight as hard as they can to get rid of the tax increases. However, I think their effect would be good for the overall future of the United States. Just another way of looking at it.

Fiscal Cliff is in reference to the ensuing unemployment and recession created by the Congresional deadlock. The DoD will absorb a unequal share of the cuts and therefore, suffer the most. Great,
if that is what Congress wants; then an immediate unplanned withdrawal from Afghanistan is warranted.
If modernization efforts in DoD are cut, then virtually all DoD budget outside of personnel will have to be used to Reset the force hardware currently in use. This will not bode well for the pivot to the Pacific
strategy. With a hollow force structure, the US armed forces will be confined to their bases. I see a repeat of the post Vietnam war military in the making.

No, the military is not “among th most wasteful spenders”. Entitlement programs are. The LCS is a good program that has sadly gone off the rails in terms of costs. If it weren’t for costs, there wouldn’t have been any fuss about it.

And no, even cancelling the F-35 program entirely would not have paid for sequestration, because, as costly as the F-35 program is, its annual budget is not large enough to pay for sequestration, even if the SECDEF had the latitude to distribute the cuts.

No, the military has not been given “excess amounts of money” — barely 4.2% of America’s GDP and a paltry 17% of the federal budget. A tiny share, considering that it’s supposed to be the federal government’s #1 Constitutional priority and the only large expenditure authorized by the Constitution. (Entitlements are utterly unconstitutional.)

No, cutting defense spending does not automatically make the military more efficient. In fact, it often makes matters WORSE by leading to cuts in weapon orders and development programs, and thus to cost growth. This is exactly what happened in the 1970s, while in the 1980s, under President Reagan, while defense budgets grew, the scale of waste and cost overruns SHRANK.

And no, the US military is not “already leagues ahead of our nearest competitors”. In fact, Russia and China have already closed most of the gaps with the US and are now working hard on closing the remaining few gaps. Yet, the vast majority of Americans don’t know that and don’t realize (or don’t care) just how close China and Russia already are to overtaking the US in terms of military power.

As for spending, China’s real military budget is between $180 bn and $250 bn (per the 2012 CMPR report), and that’s without accounting for PPP differences. If these differences are accounted for, China’s budget has to be multiplied by a factor of at least 3, meaning it’s between $540 bn and $750 bn per year, more than the US military budget. In China, one dollar can buy much more than in the US.

“The Budget Control Act mandates a 10 percent cut, or about $500 billion, to planned defense spending over the next decade.”

WRONG.

The FIRST phase of the BCA mandates a $487 bn cut to planned defense spending over the next decade. It’s a real term cut, though, as it will take defense spending (in real numbers, in FY2013 dollars) from $535 bn in FY2012 to $521 bn this FY.

SEQUESTRATION is an additional cut (a “penalty” for the Super Committee not being able to produce any deficit reduction plan), and it will cut a full $550 bn out of defense spending over the next decade — $55 bn every year. It is NOT a mere cut to “planned spending” — it’s a real term cut. It will bring defense spending down to $469 bn in January 2013 and keep it below $500 bn (not to mention, well below today’s level) for the entirety of the sequestration decade (if not longer).

Oh, they have the knowledge, but they don’t care because it don’t effect them. They know people will vote for them no matter what.

This is the worst House of Rep’s in the history of America. They want the President to do their jobs for them, thats why boener can’t get anything passed in the house he’s suppose to be in control of. Before Christmas, the teabaggers in the House walked out on him.…how’s that for leadership eh???

Your completely ridiculous guy, you want Russia and China become the matsers of the world? and after that you will work in Shenzen for a knuck of rice

In a sense entitlements are killing us, but the reason why they are killing us is because taxes got cut way to far, and the conservatives went on a spending spree that would make a Kennedy blush. Medicare and Social security are paid for by every working American via direct tax deductions — and if it wasn’t for the raiding of the social security trust fund we’d be flush with cash (and Social Security isn’t an entitlement — thats paid for — and the so-called republicans spent it!).

If you read the Congressional Budget Office report on what brought the current economic and financial crisis on, you’ll find it was the Bush tax breaks for the super wealthy, the largest corporate welfare program in history (Medicare Part D), and two unfunded wars. Hence — you are correct: the entitlements are killing us: it is long past the time to KILL entitlements in the form of tax breaks for the super wealthy and entitlements for profitable corporations in the form of corporate welfare and/or sweetheart deals.

And we could remove the tax limit on Social Security, and then the program would be flush for the next 80 years.

Obama would never cut these slavery entitlements. He has failed to lead.

Both house and senate are worthless, the only ones they look out for is themselves. One term in congress gets retirement and health care, what do we get cuts in benefits and pay. They showed us what they think of the fiscal cliff, they left town. They haven’t completed any legislation in over 4 years and these are the people that are suppose to guide this country. GOD HELP US.

I wish we, the people, could pass a bill that congress and the President’s pay and benefits are the first to be cut if they don’t do their job before 31 Dec. If I didn’t do my job there be consequences but all they get is you won’t be re-elected.

Just to be clear: 2/3 of the budget is in Medicare, Medicaid, and Social Security. The blanket term ‘entitlements’ makes people think ‘welfare’, but the only welfare programs that are big enough to actually be visible in the national budget are food stamps and the Earned Income Credit, and they’re small potatoes compared to M&M and SS.

I saw an interesting analysis a few weeks ago. Basically, the federal budget has been balanced (on average) since about 1950 — except for health care costs. That’s the $10T debt, all by itself.

Too bad there’s no mechanism for a national referendum. I think I could get good support for a bill that said “If Congress does not pass a budget on time, every year, the sitting Congressmen are fired as of the next election cycle, and may not run for re-election for 3 years after that.”

You’re dead wrong.

The taxes that are being used to finance Medicare, Medicaid, and SS are not, and for a long time have not been, sufficient to pay for the huge cost of these entitlement programs. Medicare and Medicaid have always been insolvent bottomless pits that always had to be subsidized by taxpayers — payroll taxes were never sufficient to pay for them. Today, SS is also in the red, which means that its payroll taxes are also insufficient to cover its huge cost. Even if the SS trust fund hadn’t been “raided”, that would still not have been close to enough to pay for the cost of these programs, let alone to make it awash with money.

Looking ahead, the three entitlement programs have future unfunded liabilities of $100 trillion.

The Bush tax cuts (which cut taxes for everyone, not just “the super wealthy”) actually increased federal revenue. They did not cause the current economic and financial crisis; Big Government meddling with the economy, coupled with the Federal Reserve, did. The Bush tax cuts revived the economy in 2001, after it collapsed following the tech/dot-com bubble.

The Afghan and Iraqi wars were fully funded — with income tax revenue.

“Conservatives” did not go on a spending spree; President Bush did. This spending spree included Medicare Part D (i.e. an expansion of Medicare), No Child Left Behind, gargantuan transportation spending, farm subsidies, etc. But in FY2007, after six years of Bush’s “spending spree”, the budget deficit was only $161 bn. Guess what happened then?

Democrats took over the Congress. Since then, budget deficits have grown, and since FY2009, they have never been below $1 trillion, thanks to the Democrats’ and Obama’s refusal to cut spending (except defense spending).

You clearly don’t know what you’re talking about; please educate yourself before you write anything.

The ONLY solution to the current crisis is to bring the federal government back within the limits authorized by the Constitution. This means abolishing Medicaid and all unconstitutional discretionary programs and agencies (including the Education and Energy Departments) immediately.

SS and Medicare, however, cannot be abolished immediately, because far too many seniors are dependent on them.

So they will have to be gradually phased out in favor of market solutions. One solution would be to let people choose between SS and private retirement accounts, as is the case in Chile and Australia. This would gradually shift all of that spending out of the government sector and into the private sector.

“The Afghan and Iraqi wars were fully funded — with income tax revenue. ”

They were fully funded-but the USG has been borrowing money for years. You cannot play accounting shuffleboard and say X is tax funded and Y is borrowed money, especially since there is no direct tax that sends money directly to the DoD.

Re SS, it just shows that pensions are expensive. The private sector already knows this and companies are moving more towards 401k’s and IRAs, unless you are a peon. Plenty of peons out there.

There’s no VA in the Constitution either…

Simple: Tell your sheepfriends to not vote for the incumbent again. Find someone to run against them, perhaps in your own party. And if they take a single outside dollar…well, then they’re not your rep now are they?

US Unfunded Liabilities, $122,000,000,000,000 (122 Trillion) plus
US Debt as of today, $16,000,000,000,000 (16 Trillion) plus
US Annual Deficit 2012 $1,000,000,000,000 (1 Trillion) plus
US Population 2012, 315,000,000 (315 Million) plus
Dollars each US Citizen owes today for US debt ($16T divided by 315 Million), $50,000 ($50 Thousand dollars)
Dollars each US Citizen owes for future Unfunded Liabilities (122T / 315M), $387,000 ($387 Thousand dollars)
Man, Woman, Child, Young and Old, Rich or Poor. Enough is Enough.
mericans need to wake up and demand constitutional based principled leadership by each of our three government branches, Executive, Legislative and Judicial. Americans also must vote with their pocket books and deny MEDIA organizations that inflame us instead of informing us for ratings gain. We have a great nation, but we are acting like spoiled children. Its time to grow up America and help each other, freedom is not an entitlement…each generation must earn it.

Close, but not quite. I know conservatives love to claim that the Bush tax cuts increased revenue, because that would validate their theology, but there’s no evidence for it. A rising tide lifts all boats, and the economic boom of the late 90’s (which was certainly not due to the Bush tax cuts) is what increased revenue.

Similarly, the growth in the deficit has been driven mostly by increases in mandatory (not discretionary) accounts, which haven’t been much impacted by recent Democratic waste. The only big jump was the one you noted — the prescription drug benefit under Bush 2. Those mandatory accounts are a bipartisan disaster that dates back as far as Reagan, with both parties contributing to the current mess.

Despite the current Congress’s posturing, this is not a partisan issue. It’s a politician issue, with our elected officials of every party equally willing to mortgage the future to buy votes today. The only difference is (sometimes) whose votes they are buying.

Face it two BIG reasons why we will go over the cliff. First Obama wasted too much time talking about banning lawful guns and gun owners the last week. Second even harry Reid admits we going over the cliff and I think Democrats want it. They ant the American system to fail so they can replace it by Socialism.

Deliberate Fiscal Irresponsibility with Intent to harm the Unitied States is as TREASONOUS as selling secrets to adversaries with intent to harm the United States. Perhaps its time to remind all branches of the government its duty
I do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter: So help me God.

The GOP never should have allowed to put the Pentagon budget into the sequestration deal to begin with. That’s treachery to say the least. They were playing into Obama’s hand . They so far have also failed to adequately comment on the Chinese Nuclear build-up.

worst house
worst senate
worst president

what else is new—it is the same disfunctional group we have had for the last four years

Obama may have cut his vacation short but thats nothing. The man is still campaigning! Why? Because now he is faced with doing what he fears most, doing his job. He has been campaigning non-stop since he ran for the school board in Chicago. He never has done his job, written any legisllation or taken a stand on anything(based on his 94% “Present” voting record inthe Illinoise House and Senate and the US Senate). Now he is trapped and has to do his job.
I was at Detroit Diesel last week, the day after the President was there. I was totally disrespected by UAW workers for wearing a 82nd Airborne ballcap. They were all for cutting the whole military, then I explained that 39% of their products were sold to the US Government, mainly the military, and that drastically cutting the military was cutting their own throats. Most had no clue. Talk about dumbed down voters.

It will never be fixed. We WILL be Greece in 5–6 years. China is just letting us build the Ford class carriers, so they can call all mature US T-bills they hold and repo the ships. Remember the anarchy in Greece started after just one bank that held .065% of their mature notes asked for payment.
The Ruling class(career politicans) is only concerned about staying in power. If the Republicans ever want to run our country in a conservative way thay need to start with self imposed term limits. 24 total years in Washington maximum, reguardless of which level you serve at(elected, appointed or just hired by the federal government). Some young guy over at the University of Arizona’s Daily Wildcat did a research project and figured out that my Senator(the RINO-in-chief) John McCain had spent 344 days in Arizona in the last 12 years. WTF over? How can he represent our state?
Remember get your weapons and ammo before Obama signs the UN Weapons charter in March, after that all personal weapons sales will be in the UN data base.

Selling secrets to adversaries with intent to harm the United States.

Yea well what you going to do the republicans do that too.

Top Dog, the ineffectiveness of Congress goes through both parties. It doesn’t matter who is in charge. A couple weeks ago when Congress decided to take up the “fiscal cliff” issue again Senator Reid flat out said Boehner’s plan wouldn’t pass the Senate for no other reason than he wouldn’t even allow it to be voted on. Reid has been in charge of the Senate for several years now. Critical legislation (like the federal budget) doesn’t even get put up for a vote based on his say so. Despite having just got reelected, many members of Congress aren’t willing to do anything that would upset their far left or right base nor appear to give the other side something that looks like a “win” you and me be damned.

There is a mechanism. It’s called amending the Constitution. We do it every once in a while.

Did the University of Arizona project also look into how many days Congress works each year and how little they actually accomplish? Spending roughly 1 year out of 12 means on average he spent 1 month per year in the state. Congress has a hell of lot more vacation days than that. Did the report say where he was?

You have to laugh at the Military socialists and thier nonsense about thier job being “consitutionally mandated”. Used to be service was an honour, now the culture of entitlement is so extreame the army has to hold counciling sessions to let men know they wont be getting senior managment possiitons when they get out becaus they dont have any skills LOL.

Ordinary Americans are getting sick and tired of paying for a military that clearly puts it’s own interests ahead of the nation’s.

The economic boom of the 90’s was primarily based on one thing, the end of the Cold War. Clinton walked into the White House at the perfect moment to change our economic trajectory, and he played small ball. Hindsight is 20–20, but that was the last opportunity to cut our spending a bit and slightly increase our taxes to get our house in order.
Now we have to cut spending in a painful way and increase taxes at the same time. And defense and entitlements are both very large parts of the equation. Defense has to be cut by at least 5%, possibly 15% over the longer term, and that is going to be painful. Entitlements have to be capped and possibly even rolled back, and that is going to be very difficult to achieve, with our aging population. The last of the baby boomers start to retire in 12 years, so prepare for ‘Max Q’ as NASA puts it.

Racist much?

U.S. Budget for Fiscal Year 2013 (Oct 2012 — Sep 2013)
Defense Budget $700,000,000,000 ($700 Billion)
Non Denfense Budget $565,000,000,000 ($565 Billion)
Social Security $820,000,000,000 ($820 Billion)
Medicare $528,000,000,000 ($528 Billion)
Medicaid $283,000,000,000 ($283 Billion)
Troubled Asset Relief Program $12,000,000,000 ($12 Billion)
Other Mandatory Programs $571,000,000,000 ($517 Billion)
Net Interest on Debt $246,000,000,000 ($246 Billion)
Adjustments for Disasters $2,000,000,000 ($2 Billion)
Joint Committee Enforcement -$71,000,000,000 (-$71 Billion)
Total US Government Expenditures Budgeted for 2013
$3,655,000,000,000 ($3 Trillion 655 Billion)

Total US Revenue
$2,882,000,000,000 ($2 Trillion 882 Billion)

Deficit $772,000,000,000 ($772 Billion)

The fiscal year which ended on 30 September ended up with a $1.07 trillion deficit.

You are a coward. State your position openly so all can see who you are. Most racist like you are cowards.

Please get your GED.….a mind is a terrible thing to waist.

This is the Budget submitted to congress for FISCAL Year 2013 (Sep 2012 through October 2012). It suggests a decline in the deficit, but we are still spending beyond our means.

Yep, sorry didn’t see that first bit.

agreed… have my bachelors by the way…working toward a master’s

Would a flat tax not resolve many of the issues that these so called tax and spend idiots that we have running our country help take care of the problem that they created from the get go. We have this thing in the manufacturing sector called lean manufacturing. Companies that go to this practice get a tax break from our gov. how about they use this also. Why are we as a country so involved in every other countries affairs. Bring all of our troops back home and put them on our borders. Take all these folks that are in prison and have them fill pot holes in the streets and pick up trash.

What do you think you are doing now? modern day slavery.

With our fine leadership in Washington, setting the example for the rest of us to follow, what would your house look like if you did the same thing? You would not have one and at best, have a park bench until yue are kicked off of that because you are a eye sore are have not paid your taxes to be there.

Why do we have to cut the defense budget…why don’t we just cut the aid to foriegn countries and illegal aliens and take care of the USA first. I bet we could save billions doing these cuts. Also we could cut the Senate and House salaries…if I am not mistaken they just got another raise and all they are doing is bankrupting our country. I guess they are like CEO’s with golden parachutes, the worse job they do the better exit package they get.

One thing not being talked about is the pay role tax cut that will end is actually not a tax but a Social Security premium. They want to cut Social Security while cutting premiums through this {Tax Cut} I say let it end and then give us a real tax cut. They need to help Social Security not Cut it on both ends Benefits and premiums. This was not a true tax cut but a cut in Social Security.

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